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When a parent and its subsidiary use a periodic inventory system rather than a perpetual system, the income and asset balances reported in the consolidated

When a parent and its subsidiary use a periodic inventory system rather than a perpetual system, the income and asset balances reported in the consolidated financial statements are: I. affected only if there are upstream intercompany sales of inventory. II. affected only if there are downstream intercompany sales of inventory.

I

II

Both I and II

Neither I nor II

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